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The Layers of Regulation of Tribal Casinos28 April 2004
As a result of writing this column, I often get e-mails from readers with questions regarding the regulation of gaming at tribal casinos. It is amazing to see the level of misunderstanding that many people have about these facilities and their regulation. Since time constraints of my real job do not permit me to respond to each e-mail I receive individually, this column will provide an overview of the responsibilities of the regulatory bodies involved.
First and most importantly, it must be clearly understood that tribes located in this country are "sovereign." To many this concept is confusing, but it really does not need to be. In the most basic sense, the term means the inherent right or power to govern. This is a broad right. However, over the years, there have been a series of complex U.S. Supreme Court decisions that have somewhat clouded the picture by giving states and the federal government some limited powers with regard to certain tribal-related matters when certain "exceptional circumstances" exist.
In the most significant gaming-related case, the Supreme Court held that when the intent of a state law is generally to prohibit certain conduct (i.e., ban gambling altogether) then the state has a regulatory interest. If, instead, the state law generally permits the conduct at issue (i.e., the form of gaming involved), but subjects it to some regulation with respect to its non-Indian private citizens, the "exceptional circumstances" do not exist allowing the state to regulate the activity on tribal lands.
In reaction to this case, Congress, as a compromise, ultimately enacted the Indian Gaming Regulatory Act of 1988 ("IGRA") which provided detailed guidance on the roles of the tribe, the state and the federal government with regard to gaming operations. This Act defined different forms of gaming, and gave the state a limited role to enter into "compacts" with the tribes to permit casino gaming.
Under IGRA, the most important regulatory body with regard to casino gaming on tribal lands is the Gaming Commission or other tribal government authority appointed to oversee and regulate gaming. Each tribe has a tribal ordinance with regard to the conduct of games, licensing and all the typical topics any regulatory system addresses. Patrons who have complaints, or those with regulatory concerns should thus first contact the governmental division of the tribe that has this responsibility. Successful tribes take this regulatory responsibility very seriously, and go to great lengths to learn all the ins and outs of proper regulation.
Under the compacts which, in my opinion, are a form of contract with the State of Michigan, the state government has a limited oversight role in assuring that the tribal compacts are being adhered to.
Eric Bush, administrative manager, Indian Gaming Section of the Michigan Gaming Control Board made the following observations:
"Our regulatory responsibility is outlined in our compact. The state's role is to provide oversight to assure compliance with the compact.
"Sovereignty creates a lot of grey areas that normally wouldn't exist between the state and other businesses. It is like dealing with a foreign country. They expect and deserve the same respect and deference that any other sovereign government would have."
The federal role is even further removed and is handled by the three-member National Indian Gaming Commission Its focus is on assuring that gaming is being conducted in compliance with the Indian Gaming Regulatory Act. Nelson Westrin, the former executive director of the Michigan Gaming Control Board, now sits on the NIGC. In an interview with Michigan Gaming, Mr. Westrin made the following observation:
"We monitor and validate the adequacy of the regulations. The tribes are the primary regulators and we make sure that they are doing so. They are sovereign and we respect that, but they have to understand that Congress has an interest in this and we are assigned that responsibility to ensure that the policies and purposes of IGRA are met for the benefit of the tribes.
"IGRA contemplated that the NIGC would work cooperatively with tribal gaming commission. The fact is that tribal regulators are the primary regulators of the activity. That is important for the state and federal governments to recognize. We are involved in an oversight and validation capacity. We monitor and determine whether or not they are doing an adequate job."
Mr. Westrin noted that the NIGC is currently seeking input from the states with regard to how well the current tribal regulatory process is working.
In summary, tribal gaming is regulated and there are many different layers to this regulation, the most significant of those being the tribe's Gaming Commission. These regulators take their jobs seriously and should be respected for the hard work they do. It is through their efforts that Indian gaming has flourished. Current NIGC Commissioner Phil Hogen recently put it succinctly to Tribal Government Gaming, a new publication by Global Gaming Business Magazine.
"We have found that the tribes that are following the letter of the statute are doing well. . . . It goes hand-in-hand."
Proper regulation truly does go hand-in-hand with success. The growth of Michigan tribal casinos reflects the ongoing dedication by the tribes to do the job right as part of the proper exercise of their sovereignty.